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Lou Simpson Adds Precision Castparts to Portfolio in First Quarter

Warren Buffett (Trades, Portfolio) has called Lou Simpson (Trades, Portfolio) "a cinch to be inducted into the investment hall of fame," and he should know. Simpson was CEO of capital operations for GEICO when Buffett bought the company in 1996, and he remained with the company until 2010.


Over a quarter of a century, Simpson produced average annual gains of more than 20%.

Now retired from GEICO, Simpson bought only one new stock in the first quarter - Precision Castparts Corp (PCP), a Portland, Oregon-based maker of parts used in the aerospace, industrial gas turbine and defense industries. Simpson bought 1,352,140 shares for an average price of $212.18 per share. The transaction had a 9.75% impact on his portfolio.

That made Precision Castparts the fifth-most valuable stake in Simpson's somewhat abbreviated portfolio.

Precision Castparts has a market cap of $29.17 billion and an enterprise value of $34.06 billion. It has a P/E of 19.8, a Price/Book of 2.8 and a Price/Sales of 3.0. Warren Buffett (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), Bill Nygren (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Jeff Ubben (Trades, Portfolio), Daniel Loeb (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Westport Asset Management (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Scott Black (Trades, Portfolio), Ron Baron (Trades, Portfolio), Tom Russo (Trades, Portfolio), Ray Dalio (Trades, Portfolio), George Soros (Trades, Portfolio), Jeff Auxier (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Prem Watsa (Trades, Portfolio) and First Eagle Investment (Trades, Portfolio) have shares of Precision Castparts in their portfolios. RS Investment Management (Trades, Portfolio) sold its stake in the first quarter.

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Most of Simpson's first-quarter deals were adds to existing holdings. In fact, he added to all four of the stakes in his portfolio that are more valuable than Precision Castparts - Valeant Pharmaceuticals International Inc (VRX), Brookfield Asset Management Inc (BAM), Wells Fargo & Co (WFC) and Berkshire Hathaway Inc (BRK.B).

Simpson added 104,313 shares to his most valuable stake, Valeant Pharmaceuticals, a Canadian pharmaceutical company, for an average price of $177.4 per share. The deal had a 0.71% impact on his portfolio.

Valeant Pharmaceuticals has a market cap of $80.62 billion and an enterprise value of $102.26 billion. It has a P/E of 85.7, a Price/Book of 12.3 and a Price/Sales of 9.4. Ruane Cunniff (Trades, Portfolio), Bill Ackman (Trades, Portfolio), Jeff Ubben (Trades, Portfolio), Glenn Greenberg (Trades, Portfolio), Steve Mandel (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio), John Paulson (Trades, Portfolio), Chris Davis (Trades, Portfolio), Jana Partners (Trades, Portfolio), Lee Ainslie (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Jim Simons (Trades, Portfolio), Private Capital (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of Valeant in their portfolios. Steven Cohen (Trades, Portfolio) and George Soros (Trades, Portfolio) sold their stakes in the first quarter.

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Simpson acquired 3,513,471 shares of Brookfield Asset Management, a Toronto, Ontario-based company that handles total assets under management of more than $200 billion, for an average price of $35.3 per share. The purchase had a 4.31% impact on Simpson's portfolio.

Brookfield Asset Management has a market cap of $32.96 billion and an enterprise value of $110.55 billion. It has a P/E of 10.7, a Price/Book of 1.6 and a Price/Sales of 2.0. Murray Stahl (Trades, Portfolio), Chris Davis (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Third Avenue Management (Trades, Portfolio), Ron Baron (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) have shares of Brookfield in their portfolios. Jim Simons (Trades, Portfolio) sold his stake in the first quarter.

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Simpson added 330,731 shares of Wells Fargo, a San Francisco-based banking and financial services company, to his portfolio for an average price of $54.04 per share. The purchase had a 0.62% impact on Simpson's portfolio.

Founded in 1852, Wells Fargo has a market cap of $291.5 billion and an enterprise value of $488.73 billion. It has a P/E of 13.7, a Price/Book of 1.7 and a Price/Sales of 3.5. Warren Buffett (Trades, Portfolio), Dodge & Cox, James Barrow (Trades, Portfolio), Chris Davis (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Tom Russo (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Brian Rogers (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Bill Nygren (Trades, Portfolio), Tweedy Browne (Trades, Portfolio), HOTCHKIS & WILEY, Mario Gabelli (Trades, Portfolio), Bill Frels (Trades, Portfolio), David Abrams (Trades, Portfolio), Donald Yacktman (Trades, Portfolio), Charles Brandes (Trades, Portfolio), Richard Pzena (Trades, Portfolio), NWQ Managers (Trades, Portfolio), Yacktman Fund (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Sarah Ketterer (Trades, Portfolio), Charlie Munger (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), RS Investment Management (Trades, Portfolio), Arnold Van Den Berg (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), John Hussman (Trades, Portfolio), Scott Black (Trades, Portfolio), Bruce Berkowitz (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), John Buckingham (Trades, Portfolio), Prem Watsa (Trades, Portfolio), Manning & Napier Advisors, Inc, David Dreman (Trades, Portfolio), Third Avenue Management (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), T Boone Pickens (Trades, Portfolio), Jeff Auxier (Trades, Portfolio) and First Eagle Investment (Trades, Portfolio) have shares of Wells Fargo in their portfolios. Richard Snow (Trades, Portfolio), Ray Dalio (Trades, Portfolio), John Burbank (Trades, Portfolio), Stanley Druckenmiller (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio) and Caxton Associates (Trades, Portfolio) sold their stakes in the first quarter.

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Simpson bought 114,535 Class B shares of Berkshire Holloway, a multinational holding company based in Omaha, for an average price of $147.14 per share. The deal had a 0.57% impact on Simpson's portfolio.

Berkshire Hathaway has a market cap of $328.74 billion and an enterprise value of $352.21 billion. It has a P/E of 16.5, a Price/Book of 1.4 and a Price/Sales of 1.7. Bill Gates (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), David Rolfe (Trades, Portfolio), Tom Russo (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Jim Simons (Trades, Portfolio), Chris Davis (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Tweedy Browne (Trades, Portfolio), Charles de Vaulx (Trades, Portfolio), Chuck Akre (Trades, Portfolio), Murray Stahl (Trades, Portfolio), Arnold Van Den Berg (Trades, Portfolio), Bruce Berkowitz (Trades, Portfolio), Scott Black (Trades, Portfolio), Ronald Muhlenkamp (Trades, Portfolio), John Rogers (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Zeke Ashton (Trades, Portfolio), Whitney Tilson (Trades, Portfolio), Prem Watsa (Trades, Portfolio), Dodge & Cox, Donald Yacktman (Trades, Portfolio), Bill Frels (Trades, Portfolio), Manning & Napier Advisors, Inc, Louis Moore Bacon (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Jeff Auxier (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Tweedy Browne (Trades, Portfolio) Global Value, Wintergreen Fund (Trades, Portfolio) and Bestinfond (Trades, Portfolio) have shares of Berkshire Hathaway in their portfolios. Mason Hawkins (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Chuck Royce (Trades, Portfolio) and Mohnish Pabrai (Trades, Portfolio) sold their stakes in the first quarter.

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Simpson also added to his existing stakes in Charles Schwab Corp (SCHW), U.S. Bancorp (USB), Crown Holdings Inc (CCK) and Liberty Global PLC (LBTYK).

Simpson sold his 1,594,678-share stake in DirecTV (DTV), a California-based direct broadcast satellite TV provider, for an average price of $86.38 per share. The sale had a -5.3% impact on Simpson's portfolio.

In April, the Better Business Bureau's National Advertising Division ruled against DirecTV in a complaint about its advertising claims raised by cable providers. The NAD instructed DirecTV to modify its advertisements or take them off the air. While appealing the ruling, DirecTV said it had already changed its advertising campaign.

DirecTV has a market cap of $46.23 billion and an enterprise value of $61.73 billion. It has a P/E of 15.9 and a Price/Sales of 1.4. Warren Buffett (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), John Paulson (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Jim Simons (Trades, Portfolio), David Abrams (Trades, Portfolio), George Soros (Trades, Portfolio), James Barrow (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), John Hussman (Trades, Portfolio), Robert Bruce (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), Jeff Auxier (Trades, Portfolio), RS Investment Management (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Lee Ainslie (Trades, Portfolio) have shares of Directv in their portolios. Ken Fisher (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Ronald Muhlenkamp (Trades, Portfolio) and David Dreman (Trades, Portfolio) sold their stakes in the first quarter.

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Simpson reduced his stakes in two companies - Oracle Corporation (ORCL) and United Parcel Service Inc (UPS).

He sold 33,925 shares of Oracle, a California-based computer technology corporation, for an average price of $102.61 per share. The transaction had a -8.27% impact on Simpson's portfolio.

Oracle has a market cap of $191.32 billion and an enterprise value of $180.24 billion. It has a P/E of 17.9, a Price/Book of 3.9 and a Price/Sales of 5,1. James Barrow (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Donald Yacktman (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), First Pacific Advisors (Trades, Portfolio), Steven Romick (Trades, Portfolio), HOTCHKIS & WILEY, Yacktman Focused Fund (Trades, Portfolio), Yacktman Fund (Trades, Portfolio), Richard Pzena (Trades, Portfolio), Ken Fisher (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Bill Nygren (Trades, Portfolio), Chris Davis (Trades, Portfolio), Charles de Vaulx (Trades, Portfolio), NWQ Managers (Trades, Portfolio), Sarah Ketterer (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Tom Gayner (Trades, Portfolio), RS Investment Management (Trades, Portfolio), Paul Singer (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Charles Brandes (Trades, Portfolio), Manning & Napier Advisors, Inc, Robert Olstein (Trades, Portfolio), John Rogers (Trades, Portfolio), John Buckingham (Trades, Portfolio), John Hussman (Trades, Portfolio), Mark Hillman (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Jeff Auxier (Trades, Portfolio), Bill Frels (Trades, Portfolio), Ray Dalio (Trades, Portfolio), David Dreman (Trades, Portfolio), Murray Stahl (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Tom Russo (Trades, Portfolio) have shares of Oracle in their portfolios. Ruane Cunniff (Trades, Portfolio), Jim Simons (Trades, Portfolio) and Ronald Muhlenkamp (Trades, Portfolio) sold their stakes in the first quarter.

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This article first appeared on GuruFocus.